Executive Briefings

CFOs Should Be as Concerned with Supply Chain Resilience as They Are About the Markets

By: CFO 03.02.2015

Chief financial officer wear a lot of hats. They oversee the treasury, monitor our markets and position our companies for the future. Here's another hat they should be wearing: that of the champion of supply chain resilience.

This role entails taking a hard look at the vulnerabilities many companies have lurking in their supply chains. Manufacturers retain supply chain partners all over the world to take advantage of affordable labor, key customer clusters, and access to raw materials. This globalization, however, has made the typical company's supply chain more complex and distributed than ever, leading to potentially greater vulnerabilities.

Careful management of such complexity often yields the best business results. Supply chain executives are lauded for driving out costs, making supply chains "lean," and achieving just-in-time delivery.

Streamlining a supply chain, however, can be a gamble. The same efficiency that keeps costs down often creates vulnerability. And when a brittle supply chain snaps, customers don’t get their products, companies lose revenue, brands are sullied, and the company suffers.

This role entails taking a hard look at the vulnerabilities many companies have lurking in their supply chains. Manufacturers retain supply chain partners all over the world to take advantage of affordable labor, key customer clusters, and access to raw materials. This globalization, however, has made the typical company's supply chain more complex and distributed than ever, leading to potentially greater vulnerabilities.

Careful management of such complexity often yields the best business results. Supply chain executives are lauded for driving out costs, making supply chains "lean," and achieving just-in-time delivery.

Streamlining a supply chain, however, can be a gamble. The same efficiency that keeps costs down often creates vulnerability. And when a brittle supply chain snaps, customers don’t get their products, companies lose revenue, brands are sullied, and the company suffers.